9-year-old legal war hots up: Government authorises Antrix to file winding up plea against Devas in tribunal

NEW DELHI: The nearly-decade-long Antrix-Devas war is hotting up. The Central government, in an extraordinary move, on Monday authorised Indian Space Research Organisation’s (Isro’s) commercial wing Antrix Corporation and its CMD to file a winding up petition in the national company law tribunal (NCLT) against Devas Multimedia Pvt Ltd.
The Centre’s move came in the wake of a US court order last year awarding the Bengaluru-based startup $1.2 billion compensation in the 2005 satellite deal cancellation case and the Supreme Court later staying the US court order.
A notification in the official gazette issued on Monday stated, "In exercise of the powers conferred by clause (c) of sub-section (1) of Section 272 of the Companies Act, 2013 (18 of 2013), the Union government hereby authorises Rakesh Sasibhushan, CMD, Antrix Corporation Ltd, to present a petition before the tribunal for winding up of Devas Multimedia Private Ltd on the grounds specified under clause (c) of sub-section (1) of Section 271 of the Companies Act."
Antrix CMD Rakesh Sasibhushan
The petition for winding up a company under clause (c) of sub-section (1) of Sec 272 of the Companies Act means NCLT can wind up a company if an application is made by the Union government and that the tribunal is satisfied that "affairs of a company have been conducted in a fraudulent manner or it was formed for fraudulent or unlawful purpose".
On being contacted by TOI, Antrix CMD Rakesh Sasibhushan refused to comment on the issue.
On October 30 last year, US district judge Thomas S Zilly in Seattle had ruled that Antrix should pay a compensation of $562.5 million to Devas and related interest rate amounting to a total $1.2 billion. However, on November 11, the Supreme Court kept in abeyance the effect of the US court order.
The startup had first moved the international arbitration court against the deal cancellation in June 2011. The case thereafter witnessed the court of arbitration tribunal ruling in favour of Devas and the CBI chargesheeting senior Antrix and Isro officials, including the then Isro chairman G Madhavan Nair, for providing "wrongful gains to Devas." The controversy led to an early exit of Nair as Isro chairman since he was the head of Antrix governing council when the deal was finalised in 2005.
As per the January 2005 agreement, Antrix had agreed to build, launch and operate two satellites — Gsat-6 and Gsat-6A — and lease out 90% of the satellite transponder capacity to Devas, which had planned to use it to offer hybrid satellite and terrestrial communication services throughout India. In its lawsuit filed in the US court in September 2018, Devas said three separate international tribunals and nine different arbitrators had found the deal termination to be wrongful.
Antrix, on its part, told the court that the deal was terminated based on a Cabinet decision on February 17, 2011. The Manmohan Singh-led CCS had concluded that because of the “strategic requirements” for S-Band spectrum, the UPA government would not be able to provide Antrix with an orbital slot for commercial activities, it said.